To make sure refinancing is the right choice for you, thoroughly consider the benefits versus the costs.
The benefits of refinancing
Most people are interested in refinancing their mortgages to get a:
- Lower interest rate
- Lower monthly payment
- Better loan and term
You may enjoy:
- Significant savings over the life of your loan
- Purchasing power with cash for home renovations, education costs and more with cash-out refinancing
- Simpler and more affordable finances with debt consolidation
The cost of refinancing
When you refinance, you'll have to pay for:
- Home appraisal. Prices vary, but appraisals are typically paid up front by the home owner.
- Costs to close. You may have the choice to include this amount in your refinancing so that you don't have large out-of-pocket expenses.
Once you have estimated closing costs, figure out how long you plan to stay in your home. Then you can determine how much the lower monthly payments will save you during that time, so you'll be able to tell if it's a good decision to refinance.
And remember to consult a tax advisor when you refinance. Depending on your situation, your deductions may be different for the upcoming tax year. If you choose cash-out refinancing, keep in mind that the IRS has specific guidelines(opens in a new tab) about the tax deductibility of mortgage interest.
The bottom line
For many people, the benefits of refinancing outweigh the costs. You can save money if you choose to refinance at an opportune time, and if you decide to stay in your home long enough to reap the benefits of refinancing. Just be sure to cover all the bases as you make your decision.
Keep it up. You're getting smarter about home buying.
3 Reasons to Refinance (Article)
Consider interest rates, mortgage options, and your personal plans when deciding to refinance.
Benefits of Refinancing to a Veterans Administration Loan (Article)
Veterans Administration (VA) mortgages are among the primary perks of military service, and the benefits don't stop when it's time to refinance.
What Is Cash-Out Refinancing? (Article)
Learn about the refinancing option that allows you to take the difference between your old and new mortgage in cash.
When Should I Refinance? (Article)
Make sure you're refinancing at the best possible time by asking yourself a few questions.
Loans, lines of credit and credit cards are subject to credit approval.
All BB&T mortgage professionals are registered on the Nationwide Mortgage Licensing System & Registry (NMLS), which promotes uniformity and transparency throughout the residential real estate industry. Search the NMLS Registry.
Branch Banking and Trust Company is a Member FDIC and an Equal Housing Lender.
Branch Banking and Trust Company is now Truist Bank. Learn more.
BB&T and SunTrust have merged to become Truist. Both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees and pricing. Our friendly teammates at your local SunTrust branches will be happy to walk you through their respective products. You can also learn more by contacting them at 800-SUNTRUST or SunTrust.com.